The Pros And Cons Of Shared Ownership

The Pros And Cons Of Shared Ownership

Shared ownership of property is a great route to take if you want to get onto the property ladder. However, before you jump at this chance, you should look at the pros and cons of this. Understanding the pros and cons of shared ownership will ensure that you make an informed decision regarding this type of investment of your funds.

The Pros

The primary benefit of shared ownership is the fact that you will be able to get onto the property ladder as an owner-occupier. This brings long-term stability, but without the overstretching of your finances that a full purchase would create. Additionally, you will not have to provide as large a sum as you would if you were buying outright.

Shared ownership will also decrease the monthly repayments that you have to make to your mortgage. As you are not asking for a large mortgage, you will find that the monthly payment is lower than what you would pay as rent. There is also the benefit that mortgages are more accessible with shared ownership even if you are on a lower wage.

The last benefit that you should consider is the security on tenure that comes with this. This security is unlike what you have with a private rental as you can live in the property for as long as you wish. As long as all the payments are made each month, you will not have to leave until you are ready.

The Cons

While there are a number of benefits to shared ownership, there are also a number of drawbacks. The primary drawback is the fact that not all lenders will offer mortgages for shared ownership. This means that you have to look harder for a mortgage, but it is important to note that this has been changing over recent years.

Another drawback is the fact that the property you purchase will be leasehold only. There are some properties that can become a freehold, but this will need to be agreed with the housing provider. The problem is that this will increase the costs of your ownership and might make this a less attractive offer.

The last drawback that you need to consider is the restrictions that could be placed on any home improvements that you want to complete. While you are able to internally decorate the property, the housing provider may bar you from certain home improvements. You will generally have to get permission before you make any structural changes to the property.